Exhibit 99.1
FOR IMMEDIATE RELEASE
EARTHFIRST TECHNOLOGIES REPORTS
FINANCIAL RESULTS FOR FIRST QUARTER 2005
Impact of EME Acquisition and Reorganization Reflected
In Significant Revenue Growth
Company Also Announces New Executive Management Appointments
TAMPA, FL - (BUSINESS WIRE) - May 16, 2005 - EarthFirst Technologies,
Incorporated (OTCBB:EFTI), a specialized holding company engaged in research,
development and commercialization of technologies for the production of
alternative fuel sources and the destruction and/or remediation of liquid and
solid waste, and in supplying electrical contracting services internationally,
today announced its first quarter results for the three month period ended March
31, 2005.
Financial Highlights for the Three Months Ended March 31, 2005 Compared to the
Three Months Ended March 31, 2004:
o Revenue for the quarter increased to $8,168,099 from $15,000 due to
the acquisition of Electric Machinery Enterprises, Inc. (EME), which
was consummated in the fourth quarter of 2004.
o Operating Income for the quarter increased to $524,234 from an
operating loss of $2,031,462.
o The Company incurred a net loss of $4,553,637, or $.01 loss per
basic and fully diluted share, compared to a net loss of $2,082,861,
or $.01 loss per basic and fully diluted share. The loss includes
the effects of a gain of $2,178,568 on the extinguishment of debt,
offset by a series of non-cash charges largely attributable to the
reorganization of EME and an $8.0 million convertible debt financing
that was completed in the first quarter of 2005. Due to beneficial
conversion features and options associated with this financing, a
one time, non-cash charge in the amount of $6.6 million was recorded
in the quarter. The amount is separately stated in the financial
statements and is offset by an increase to paid-in capital. The net
effect to stockholders equity is zero.
o Stockholders equity increased to $16,817,848 from a deficit of
$1,522,143.
o The Company achieved cash flow from operations of $2,081,048, a 258%
increase over cash flow from operations of $581,975 in the prior
comparable period.
As of March 31, 2005, the Company had approximately $12.3 million in cash and
receivables, working capital of $5.3 million, and total stockholders' equity of
approximately $16.8 million.
EarthFirst also announced the appointment of Frank W. Barker, Jr., CPA as the
Company's new Chief Financial Officer. Leon Toups' role has now been expanded to
serve as EarthFirst's Chief Executive Officer, President and as a member of the
Board of Directors. John Stanton will continue to serve as Chairman of the
Board.
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Prior to his appointment as CFO, Mr. Barker served as a finance/accounting
consultant to EarthFirst. He brings over 25 years proven experience in public
and private company tax and accounting, executive management, mergers and
acquisitions, equity and debt financing, and SEC financial reporting and
compliance in industries that have included construction, healthcare, retail,
wholesale, manufacturing, professional services, non-profit, broadcast and
communications.
Barker stated, "I'm very pleased and excited to accept the appointment as Chief
Financial Officer of EarthFirst. Our entire team is delighted to be off to such
a strong year and expect that subsequent quarter-over-quarter results will be
just as impressive. The EME acquisition and reorganization has clearly
strengthened EarthFirst's growth platform and reinforces our confidence that
2005 will indeed be a defining year for our Company."
"With EME fully integrated into EarthFirst, we are now focusing on capitalizing
on its renewed financial strength and industry expertise to grow rapidly," noted
Toups. "Moreover, we are very excited about the prospects for growth we are
seeing from our WESCO subsidiary and expect that it will play a significant role
in helping EarthFirst to attain measurable increases in revenue and earnings
over the coming quarters."
Concluding, Stanton added, "Our first quarter financial performance is a
testament to the strength of our business plan and its execution. With a well
established growth platform in place, experienced senior leadership in place, a
robust pipeline of potential new business being pursued, and a strong balance
sheet to support our expansion strategies, the future of EarthFirst has never
looked brighter."
EarthFirst will host a teleconference Tuesday morning, May 17, 2005 beginning at
10:00 AM Eastern, and invites all interested parties to join management in a
discussion regarding the Company's financial results, corporate progression and
other meaningful developments. The conference call can be accessed via telephone
by dialing toll free 1-800-218-8862. For those unable to participate at that
time, a replay of the teleconference can be accessed by dialing 1-800-405-2236
and entering the pass code 11030163#. The replay will be available for 30 days.
About EarthFirst Technologies, Incorporated
EarthFirst Technologies, http://www.earthfirsttech.com, is dedicated to
producing environmentally superior products from carbon-rich solid and liquid
materials currently considered wastes. The Company has conducted more than five
years of extensive development on advanced technologies to achieve this goal.
Through its subsidiary Electric Machinery Enterprises, Inc.,
http://www.e-m-e.com, the Company provides electrical contracting services both
as a prime contractor and as a subcontractor, electrical support for industrial
and commercial buildings, power generation stations, and water and sewage plants
in the US and abroad.
FINANCIAL CHARTS TO FOLLOW
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EARTHFIRST TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,
2005 December 31,
(Unaudited) 2004
------------ ------------
ASSETS
Current assets:
Cash $ 6,639,765 $ 1,482,383
Accounts receivable - net 5,700,077 8,511,692
Cost and estimated earnings in excess of
billings on uncompleted contracts 1,236,719 986,269
Inventory 1,391,827 1,400,635
Prepaid expenses and other current assets 223,519 75,034
------------ ------------
Total current assets 15,191,907 12,456,013
Property and equipment, net 4,107,426 4,340,490
Investments - at cost 300,000
Intangible assets 15,323,152 15,323,152
Loan costs and discounts 390,290
Other assets 276,897 571,603
------------ ------------
$ 35,589,672 $ 32,691,258
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long term debt $ 71,786 $ 151,898
Secured revolving note payable 2,600,000
Secured convertible term note payable 600,000
Liabilities subject to compromise 500,000
Liabilities not subject to compromise 1,850,000
Accounts payable and accrued expenses 4,804,583 6,111,140
Billings in excess of cost and estimated
earnings on uncompleted contracts 1,742,696 1,047,565
Current maturities of notes payable, related parties 715,122
------------ ------------
Total current liabilities 9,819,065 10,375,725
------------ ------------
Secured revolving note payable, non current 1,000,000
Secured convertible term note payable, non current 2,400,000
Liabilities subject to compromise - non current 3,393,359 3,394,208
Liabilities not subject to compromise - non current 4,199,866
Other liabilities 959,400 1,081,802
Notes payable, related parties, less current maturities 6,697,519
Long term debt, less current maturities 120,785
------------ ------------
Total liabilities 17,571,824 25,869,905
Majority interest 1,200,000 1,254,025
Commitments and contingencies -- --
Stockholders' equity:
Common stock, par value $.0001, 500,000,000 shares authorized,
491,413,360 shares and 301,770,150 shares issued and outstanding
at March 31, 2005 and December 31, 2004 49,143 30,177
Additional paid-in capital 72,580,374 56,795,183
Accumulated deficit (54,543,609) (49,989,972)
------------ ------------
18,085,908 (6,835,388)
Less treasury stock (1,950,000 shares at cost) (1,268,060) (1,268,060)
------------ ------------
Total stockholders' equity: 16,817,848 5,567,328
------------ ------------
$ 35,589,672 $ 32,691,258
============ ============
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EARTHFIRST TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(UNAUDITED)
Three Months Ended
March 31,
2005 2004
------------- -------------
Revenue $ 8,168,099 $ 5,000
Cost of sales 6,247,451 --
------------- -------------
Gross profit 1,920,648 15,000
Selling, general and administrative expenses 1,203,087 137,915
Research and development expenses 193,327 1,908,547
------------- -------------
Income (loss) from operations before
reorganization item, income
taxes and majority interest 524,234 (2,031,462)
Other income (expense):
Gain on extinguishment of debt, bankruptcy 2,178,568 --
Loss on disposal of assets (3,031)
Miscellaneous income 33,294
Interest expense - beneficial conversion (6,600,000)
------------- -------------
Income (loss) before reorganization item,
income taxes and majority interest (3,946,365) (2,082,861)
Reorganization item, professional
fees related to bankruptcy and
pursuit of claims (323,661)
------------- -------------
Loss before income taxes
and majority interest (4,270,026) (2,082,861)
Income tax benefit
------------- -------------
Loss before majority interest (4,270,026) (2,082,861)
majority interest (145,975) ( )
------------- -------------
Loss from continuing operations (4,416,001) (2,082,861)
Loss on disposal of discontinued operations (137,636)
------------- -------------
Net Loss ($ 4,553,637) ($ 2,082,861)
============= =============
Net Loss per common share ($ .01) ($ .01)
============= =============
Weighted average shares outstanding 379,734,581 227,479,823
============= =============
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EARTHFIRST TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(UNAUDITED)
2005 2004
------------- -------------
Cash flows from operating activities:
Net income (loss) $ (4,553,637) $ (2,082,861)
Adjustments to reconcile net loss to
net cash flows from operating activities:
Expenses funded through stock issuance 1,800,000
Beneficial conversion 6,600,000
Depreciation 77,342 2,245
Gain on cancellation of debt (2,178,568)
Loss on disposal of discontinued operations 137,636
Loss on disposal of assets 18,086
Increase (decrease) in cash due to changes in:
Current assets 2,716,194
Current liabilities (736,005) 862,591
------------- -------------
Net cash flows from operating activities 2,081,048 581,975
------------- -------------
Cash flows from investing activities:
Acquisition of property and equipment (1,635,000)
Purchase of marketable securities (300,000)
------------- -------------
Net cash flows from investing activities (300,000) (1,635,000)
------------- -------------
Cash flows from financing activities:
Proceeds from note payable, related party 1,791,516 1,049,496
Repayment of long-term debt (2,896,077)
Proceeds from Laurus credit facility 4,480,895
------------- -------------
Net cash flows from financing activities 3,376,334 1,049,496
------------- -------------
Increase (decrease) in cash 5,157,382 (3,529)
Cash, beginning of period 1,482,383 3,529
------------- -------------
Cash, end of period $ 6,639,765 $ --
============= =============
Supplemental schedule of non-cash financing and investing activities:
During 2005, the Company:
o Converted $9,204,157 of related party debt to 189,643,210 shares of
common stock
o Loan costs of $390,290 funded through proceeds of Laurus credit
facility
o Retired secured creditor in the amount of $1,676,967 through
proceeds of Laurus credit facility
o Reduced accounts payable in the amount of $51,848 through proceeds
of Laurus credit facility
During 2004, the Company:
o Converted $3,934,010 of related party debt to 49,175,125 shares of
common stock
o Converted $1,400,000 of related party debt to 10,000,001 shares of
common stock
o Issued 15,000,000 shares of common stock in acquisition of the
remaining 30% interest in a joint venture, the principal asset of
which consisted of approximately $1,800,000 of in progress research
and development, which is required to be expensed immediately.
o Issued 40,000,000 shares of common stock in exchange for the stock
of Electric Machinery Enterprises, Inc. having net assets as
follows:
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Cash $ 3,174,317
Accounts receivable and other assets 11,460,476
Property and equipment 2,023,364
Other assets 390,289
Value of goodwill associated with acquisition 15,323,152
Accounts payable and other current liabilities (6,540,682)
Related party borrowings (4,199,926)
Liabilities subject to compromise (14,540,195)
Majority interest in Cayman joint venture (823,795)
------------
Value of common stock issued $ 6,267,000
------------
Investors are cautioned that certain statements contained in this document as
well as some statements in periodic press releases and some oral statement of
EFTI officials are "Forward-Looking Statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking
statements include statements which are predictive in nature, which depend upon
or refer to future events or conditions, which include words such as "believes,"
"anticipates," "intends," "plans," "expects," and similar expressions. In
addition, any statements concerning future financial performance (including
future revenues, earnings or growth rates), ongoing business strategies or
prospects, and possible future EFTI actions, which may be provided by
management, are also forward-looking statements as defined by the Act.
Forward-looking statements involve known and unknown risks, uncertainties, and
other factors which may cause the actual results, performance or achievements of
the Company to materially differ from any future results, performance, or
achievements expressed or implied by such forward-looking statements and to vary
significantly from reporting period to reporting period. Although management
believes that the assumptions made and expectations reflected in the
forward-looking statements are reasonable, there is no assurance that the
underlying assumptions will, in fact, prove to be correct or that actual future
results will not be different from the expectations expressed in this report.
These statements are not guarantees of future performance and EFTI has no
specific intention to update these statements.
FOR MORE INFORMATION, PLEASE CONTACT
Elite Financial Communications Group, LLC
Stephanie Noiseux at 407-585-1080 or via email at efti@efcg.net
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